A commercial lease is a rental agreement where both parties expressly or tacitly agree to use the premises for a retail business or artisan activity, with direct access to the public. This excludes spaces like shopping malls or stores without direct customer access.
The commercial lease is governed by the law of April 30, 1951, along with articles 1708 to 1768bis of the Civil Code.
What is the duration of a commercial lease ?
A commercial lease typically lasts for 9 years, renewable up to 3 times, for a maximum duration of 36 years. However, a short-term lease of up to one year is possible for pop-up stores. If no notice is given upon expiration, it automatically converts into a 9-year commercial lease.
Who registers the lease ?
The obligation to register the lease falls either on the landlord or the tenant, depending on what’s stated in the contract. In general, it’s the tenant’s responsibility. Registration must occur within 4 months of signing, and the fee is 0.2% of the total rent and charges over the contract period, with a minimum of 50 euros. This gives the lease a definite date, making it enforceable against third parties.
How to renew a commercial lease ?
The tenant must request renewal between the 18th and 15th months before the lease ends, either through a bailiff or registered letter. The request must follow the formal requirements of Article 14 of the commercial lease law. If the landlord does not respond within 3 months, it is presumed that they agree to the renewal.
If the tenant fails to make this request on time, the landlord alone can decide whether to extend the lease.
Terminating a commercial lease
The tenant can end the lease early at the end of each 3-year period, with 6 months' notice. The landlord may terminate with one year’s notice, but only if it’s stipulated in the contract.
The landlord may also refuse renewal for specific legal reasons, possibly requiring compensation depending on the grounds.
What happens If neither party acts at the end of the lease ?
If neither party takes action at the end of the lease, and the tenant continues occupying the premises, the lease becomes open-ended. The tenant can terminate with 1 month’s notice, while the landlord must give 18 months' notice. The tenant can still request a renewal during the 18 to 15 months preceding the end of this notice period.
Rent indexation
If specified in the contract, rent indexation applies retroactively over 12 months, adjusting the rent for inflation.
In conclusion: The importance of expertise in commercial leases
The complexities of commercial lease law in Belgium require attention to detail and legal expertise. Navigating these rules successfully is vital for both landlords and tenants. Seeking advice from a commercial property expert can help avoid costly mistakes and ensure that transactions are compliant and smooth.
